The Link between satisfaction and customer retention

Today I was revisiting some academic readings about customer satisfaction and the effect it has on loyalty. While it is from an academic perspective, it highlights how customers need to be delighted (as opposed to "only" satisfied) to be extremely loyal. The study found that a truly delighted customer will become an evangelist of the business.

This model comes from another book (titled Service Profit Chain: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction and Value), however I've taken it from Lovelock, Patterson and Walker's "Services Marketing: An Asia-Pacific and Australia Perspective" (2007).Just to explain my thinking on this model, I'll use the airline industry as an example.

A little while ago we had to fly with one airline in Australia who fell well short of what we expected of an airline. My wife and I have always taken a car seat for our daughter and son to sit on while we're travelling by air, and despite having taken her on around 20 flights, with about 7 airlines in total, one airline refused to permit us to take a car seat on board (even though we'd paid adult fares to be able to reserve seats for both children (our son was six months old at the time, our daughter 2 years). Anyway this airline I wouldn't even rate a 1 out of 5 in terms of their service. The model predicts I would then be a terrorist - in real life I very much discourage anyone from flying with this airline, and even with all the travel that we undertake, we will also never fly this airline again.

We've also flown some other airlines, who while they weren't providing over the top service we at least hospitable, and got us from A to B. These airlines I wouldn't actively promote, but am happy to fly with them were their schedules or pricing works well for us.

Then there are two other airlines that have gone over the top with providing great service. These airlines will always be our preference for flying (Singapore Airlines for international travel, SouthWest for US domestic), and we will always recommend to our friends and family (and now, blog followers!). I would definitely rate both these airlines as a 4.5 or 5 out of 5 in any customer surveys.

While a 4 out of 5 may seem like a good rating for a customer to give (in action, I prefer using a 10 point scale to give customers the option of giving a 9 to allow for "room for improvement" as some customers like to), the reality confirmed by this model is that those customers are just satisfied with the service received (not delighted) and are less loyal and less likely to promote your business.

Welcome to Platinum Class Service!

Over the past few years I have been completing some post graduate studies and through this have researched many companies, especially in regards to customer service. Most companies either within their vision or mission statements will have some link into customer service, believing that this statement will lift the service levels within the organisation leading to higher revenue and profitability.

Unfortunately, I am sure that you have experienced a phenomenon much distant to excellent customer service. Most of the time the message from the CEO becomes so diluted when received by the shopfloor worker, that there is not the same sense of urgency in delivering customer service.

Responses such as "that's not our policy", or staff asking "how is your day" when clearly not interested reaffirm to most customers that customer service in reality is not held highly.

As an example, an old episode of Mad About You saw the ditzy waitress Ursula provide her customer service to Paul and Jamie in the restaurant they visit regularly. After a serious confrontation at the table with Paul and Jamie's friends Mark and Fran the whole table is clearly on edge with each other. Ursula then walks up asks if everything is OK, and without giving anyone a chance to respond, she walks off with a "good to hear...".

I am sure you can recall similar instances in your own dealings with businesses. Staff members who say the "right" thing, but have no real interest in what your response will actually be.

So, this blog is all about trying to help with ways to improve customer service, as well as marketing of your business to get traction (increased revenue) as a result of your customer service. Simple tips that may help improve service directly, ways to market your services to your customers, how to rectify service breakdowns are just some examples of topics that will be covered.